U.P. Cabinet approves formation of Outsource Service Corporation

Uttar Pradesh Cabinet on Tuesday (September 2, 2025) approved the formation of the Outsource Service Corporation Limited, which will appoint the outsourced employees in the State for three years with a monthly honorarium of ₹16,000-₹20,000.

The decision was taken in a Cabinet meeting chaired by Chief Minister Yogi Adityanath and the government described it as a landmark move to make outsourcing services more transparent, accountable, and employee-friendly.

Previously, there was no government agency responsible for hiring outsourced workers. Recruitment was carried out through private agencies, and there were allegations of lower honorarium being paid and social benefits not being provided.

“The corporation, established under Section 8 of the Companies Act, 2013, will function as a non-profit public limited company. From now on, outsourcing agencies will no longer be selected directly by departments; instead, the corporation will empanel agencies through a fair and transparent process via the government e-marketplace portal,” reads the official statement.

Under the new system, salaries will be transferred directly to employees’ bank accounts between the 1st and 5th of every month, along with Employees’ Provident Fund (EPF) and Employees’ State Insurance (ESI) contributions.

“The corporation was necessary as agencies earlier failed to provide workers their full honorarium and often neglected mandatory EPF and ESI contributions. This step will eliminate irregularities and guarantee every employee their rightful dues,” said Suresh Khanna, U.P. Finance Minister.

Reservation extended

The government stated that under the new framework, Scheduled Castes (SCs), Scheduled Tribes (STs), Other Backward Classes (OBCs), Economic Weaker Sections (EWS), Divyangjan, ex-servicemen, and women will receive reservations as per constitutional provisions.

Women employees will be entitled to maternity leave, while all workers will receive periodic training to enhance their skills. Moreover, ₹15,000 will be provided as funeral assistance in case of death during the service, the government added.